The ever-present problem of salary gaps seems to have no end in sight, but the situation is certainly better than before. One reason we are seeing progress is that we are talking more openly about salaries and people are more and more aware of how much different jobs pay. While keeping employee wages confidential is a common practice, the perception around salary disclosure is changing and in fact, with wage gaps remaining a prevalent issue, many employees are demanding more transparency.
Employers play an important role in eliminating pay gaps, so where do Canadian employers stand on the issue of pay transparency? To find out, Indeed surveyed a thousand Canadian employers in order to better understand current salary disclosure practices, employers’ willingness to be more transparent, and what is driving their decisions to share or not to share salary information on current or future job postings.
Just over one third of new jobs posted directly on Indeed don’t include salary information
According to Indeed data, of the new jobs posted directly on Indeed in Canada, 66% provide salary information, compared to 78% of new jobs posted in the US, and 80% worldwide.1 In New York City, a new law passed and will go into effect in April 2022, making it mandatory to disclose salaries to job seekers. In Ontario, the Employment Equity Act imposed a similar requirement in 2019 but only to private sector employers with more than 100 employees. Canada has yet to extend such legislation nationwide.
Salary transparency helps to attract and retain talent
Here’s what we know: jobs on Indeed with salaries listed have a 19% lower cost per apply on average and receive up to 90% more applications.2 Moreover, pay transparency empowers employees to negotiate their pay with their employers. In addition to these direct benefits, there is also a more subtle advantage: salary disclosure enables more transparency around pay and studies show that when there’s more transparency around pay, the salary gap shrinks.
So far, earning gaps persist in part because the issue is hidden. As such, encouraging employers to directly address the situation through disclosing pay information is a great step forward.
Canadian employers agree salary transparency is important so why don’t more do it?
Most employers in Canada tend to agree that disclosing salary information is beneficial overall. Just under 9 in 10 (88%) respondents who indicated that their company does disclose the salary on job postings agree that this disclosure has been beneficial in the hiring process. Moreover, over 3 in 5 (63%) employers who responded agree with the statement ‘’All companies should disclose salaries in the hiring process’’, with a third (33%) strongly agreeing. Finally, 7 in 10 (70%) respondents who indicated that their company does disclose the salary on job postings agree that it has been beneficial in decreasing pay gaps.
So why isn’t transparency around pay more widespread in Canada? In essence, some employers are wary of the potential limitations or constraints disclosing salaries could pose.
Top reasons why employers don’t disclose salaries in job postings
Just over 2 in 5 (41%) respondents who indicated that their company does not disclose the salary on job postings said it is because they determine new employees' salaries based on their experience and skills. Just over a third (34%) said it is because they are open to negotiation when it comes to salary and do not want to limit the number of applicants. However, knowing that pay transparency actually empowers employees to negotiate their pay, the second concern might be a misconception.
Moreover, Canadian employers may not be as inclined to include compensation in listings if they historically have not; they might be even less inclined to do so knowing that their competitors do not disclose pay information either. In our survey, when Canadian employers were asked if their competitors disclose salaries on job listings, of those who indicated competitors did not, just under half (47%) were open to disclosing salaries if other companies in their industry were to do so.
Another potential culprit is the lack of legislation in most provinces. Outside of the public sector, nothing forces companies to disclose their salaries in Canada. In contrast, there are roughly 10 states and cities in the US where employers are required by law to disclose salary ranges in the hiring process, with more bills under consideration. Perhaps such legislation would be helpful in increasing the transparency about salary information in Canada.
The link between salary disclosure and bridging the salary gap
Unfortunately, the salary gap between women and men in Canada is still around $0.89 to $1. The pandemic has seen many women leave the workplace and other underrepresented groups may find themselves at a disadvantage when trying to get competitive salaries if they don’t know how much a job can and should pay. Underrepresented groups may also face a challenge of discrimination in certain industries, and having the knowledge pay transparency offers would be of great help to them.
There is some good news: the job market seems to be flourishing, and more job opportunities open up every day with employees and candidates having more choice and control than ever before. On Indeed, the total number of Canadian job postings was up 64% on February 18, compared to early February 2020. Also, new job postings are being added to Indeed at a rapid pace, up 83% compared to its pre-pandemic rate. This is a great opportunity to implement salary information disclosure as the new norm. So many things have changed since the pandemic, some good, and some bad. This is the perfect opportunity to get something good out of it and to slowly make the world a better place. At Indeed, our mission is to help all people get jobs. By working to eliminate employment barriers for underrepresented groups and addressing the pay gap issue through salary transparency, and encouraging employers to provide meaningful pay and career progression, we also help them attract and retain quality employees.
1 Indeed Data (Canada, US, Worldwide)
2 Indeed Data (Canada)
Methodology:This survey was conducted by Censuswide on behalf of Indeed among 1,000 employers in Canada (including 250 in Quebec). The survey was conducted in February 2022. The confidence interval is +/-3.1%, with a 95% confidence level.